In 1991 the Connecticut General Assembly sought to appease a citizenry angry that lawmakers had for the first time imposed an income tax. Seeking to assure voters that they would not squander the new revenues, legislators proposed a spending cap. In 1992 voters overwhelmingly approved adding the spending-cap amendment to the Connecticut Constitution.

For much of the next two decades the amendment proved to be a farce. It did nothing to control spending. It was only recently, in 2017, that the legislature finally passed enabling legislation to make the cap work as intended, with stunning results.

Connecticut had a record $4.3 billion surplus last fiscal year, equivalent to about one-fifth of the general fund. Projections for this fiscal year, which ends in June, anticipate a $3.3 billion surplus. The surpluses have allowed the state to build a health rainy day fund and divert billions of dollars toward helping shore up the state employee and teacher pension funds, which for years were grossly underfunded. The state’s credit ratings improved, cutting the cost of paying its debts.

The fiscal turnaround has led to broad support in the current legislative session for approving an income tax cut for low- and middle-income households, with the only debate concerning the details.

It was a long time coming. The spending cap amendment approved in 1992 was supposed to prohibit the legislature from increasing general budget expenditures beyond the increase in personal income revenue or inflation, whichever was greater. But it was left to the legislature to define the terms income, inflation, and general budget expenditures. Session after session the legislature failed to do so, rendering the cap useless.

Then, in 2017, a divided state legislature — the Senate was split 18-18 and Democrats held only a slim majority in the House — led to a discordant legislative session that dragged into June. Out of the resulting negotiations came both a budget and an agreement to finally define the spending cap and create a so-called volatility cap.

Data reported by the U.S. Bureau of Economic Analysis is now used to determine increases in personal income, while U.S. Bureau of Labor and Statistics data establishes the inflation number. The legislature must live with those numbers. The volatility cap, meanwhile, stops the legislature from ballooning spending during spikes in income-tax revenue, a move intended to end the boom-and-bust budgetary cycles Connecticut had often experienced.

Progressive Democrats are rebelling, saying these fiscal guardrails are acting more as a policy straitjacket, preventing the legislature from addressing vital needs. These critics say it is unconscionable that — in a time of fiscal plenty — the nonprofit agencies providing most human services in the state remain underfunded and unable to pay their workers fair pay or provide adequate benefits. The budget proposal approved by the Appropriations Committee increases aid to these nonprofits by just $20 milllion, a 1% increase in a time of high inflation.

The rules also constraint the legislature’s ability to provide municipal aid, build early childhood education programs known to improve long-term school performance, and help public school systems still reeling from the impacts of the pandemic.

There is growing support in the Democratic caucus, which has dominant majorities in the House and Senate, to work around the cap by diverting hundreds of millions of dollars in surplus revenue before it gets into the general fund and becomes subject to the cap.

But the Democratic governor, Ned Lamont, who won reelection decisively by campaigning on the state’s dramatic fiscal improvement during his first term, has criticized this diversion idea as gimmickry intended to circumvent the fiscal guardrails.

It raises the possibility of a budgetary showdown.

Would Lamont veto a budget that contains a popular tax cut because of his objections to “gimmicks?” If he did, he would have to turn to an alliance of Republicans and fiscally moderate Democrats to uphold his veto and force changes.

Lamont, I suspect, will tolerate some modest budgetary game playing, but the message he has sent in defense of the fiscal constraints may well prevent things from getting out of hand. Lamont will have to be confronted with something egregious to veto a budget that contains a popular tax cut.

Connecticut has accumulated a surplus equal to 15% of the budget, the maximum allowed by law, which provides a cushion against any future economic downdraft. Also, as Lamont has noted, Connecticut will have paid down $8.5 billion in pension debt by the end of this fiscal year, saving $725 million annually in dollars that would otherwise be needed to service that debt. Such fiscal stability frees businesses from the fear of a tax increase around every corner and provides a foundation to grow the state economy.

Lamont may take heat within his party for his fiscal hardline, but not from the public. Politically, he is on the right side of this issue. Everyone knows what the outcome would be if voters were asked whether to repeal the constitutional spending cap or keep it in place.

Paul Choiniere is the former editorial page editor of The Day, now retired. He can be reached at paulchoiniere@yahoo.com.